Industry cheers 7.8% Q1 GDP growth, economists see India’s momentum holding

The Indian government's latest GDP figures have elicited praise from industry leaders and economists, who regard the 7.8 per cent growth in the first quarter of fiscal year 2027 (FY27) as a testament to robust domestic activity. While acknowledging the need for higher investment rates to maintain this momentum in the face of global uncertainties, these experts noted that the first-quarter expansion surpassed market expectations and highlighted India's underlying economic strength.

Saurabh Sanyal, Secretary General of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), confirmed that the growth trajectory aligned with earlier industry projections. He credited the government's comprehensive reforms, as well as proactive policies announced in recent parliamentary sessions, for attracting private investment and fueling domestic growth.

Manoranjan Sharma, Chief Economist at Infomerics Ratings, emphasized the importance of strong underlying economic fundamentals, noting that the GDP figures confirmed this trend. He stressed that maintaining this growth rate over the medium term would necessitate focused domestic interventions, including boosting private investment, productivity, manufacturing, exports, and employment.

Former Economic Advisory Council member Surjit Bhalla pointed out that achieving an additional 2 per cent GDP potential would require raising the investment-to-GDP ratio from around 28-30 per cent to 34-35 per cent. He acknowledged that global conditions influence investment requirements, stating that under favorable external circumstances, a lower investment rate might suffice. However, given the current global uncertainties, Bhalla emphasized the need to step up investment levels.

CareEdge Chief Economist Rajani Sinha echoed these sentiments, stating that the strong performance in Q1 had prompted an upward revision of the full-year growth outlook. While she anticipated some moderation in growth for the second and third quarters, Sinha remained optimistic about India's overall economic trajectory, projecting a healthy 7.3 per cent growth for the year.